Mortgages remain fairly well supported as technicals are still favorable and the market holds range bound on the uncertainty of war with Iraq. Over the Wednesday-to-Wednesday period, spreads were tighter. For example, 30-year Fannie Mae 5.5s moved in one basis point, 6s were tighter by 10 basis points, and 6.5s and 7s by six basis points. Dwarfs were five basis points firmer in 5s and seven in 5.5% and 6% coupons. Lastly, Ginnie Maes were flat in 5.5s and 6.5s, and minus five basis points in 6s and 7s.

The week saw fairly strong supply of $7 billion to $8 billion in current coupons over the last five days. Investors were mixed with many holding near the sidelines before and after Secretary of State Colin Powell's address to the U.N. Security Council. Others took advantage of the supply-induced widening and improving technicals as a result of an increased CMO bid.

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